USDCAD Overnight Range 1.2663-1.2757
USDCAD dropped like North Korean missile launch on the release of a rather dodgy employment report, touching 1.2663 from 1.2750 , where it sat before the data. Statistics Canada reported that Canadian gained 13,800 jobs in May, all of the full-time variety and that the jobless rate declined to 6.9% from 7.1%. Unless all the new jobs were fire-fighters in Alberta, the accuracy of the report is questionable. USDCAD has since bounced and is sitting at 1.2690.
The week is ending with a modest shift into risk aversion trading as Asia equity indices followed the lead of yesterday’s New York equity markets and closed in the red. The US dollar gained against the majors with the exception of CHF and JPY. There wasn’t much in the way of top tier data to guide trading and with the FOMC meeting looming next Wednesday FX markets were fairly tame.
The slide in WTI prices continued unabated during the overnight session. WTI closed at $50.40 yesterday and took a turn for the worse just before the European open. The move below support in the $50.00-15 area extended losses to $49.62. It recovered slightly in early New York trading but is still trading with a bearish tone.
The mix of soft oil prices, rising risk aversion sentiment and questions about the employment report, should limit USDCAD losses. Yesterday’s Bank of Canada, Financial System Review didn’t offer up any surprises. What it did do was emphasis the rising risks for the housing market in Vancouver and Toronto going as far as to say that surging prices in both markets are unlikely to be sustained.
USDCAD technical outlook
The intraday USDCAD technicals are bearish below 1.2750 supported by the post employment report move below 1.2690 and are looking for a break below 1.2630 to extend losses back to the may low of 1.2462. A decisive break above 1.2770 is required to shift the focus back to the 1.2870-1.2900 resistance zone. For today, USDCAD support is at 1.2660, 1.2630 and 1.2570. Resistance is at 1.2710 and 1.2760.
Today’s Range 1.2660-1.2760
Chart USDCAD Daily